Top contract oversight official at Texas health agency resigns

April 21--The top procurement official for the Texas Health and Human Services Commission has resigned -- the fifth departure from the agency as it answers to multiple contracting flaps this month.

Ron Pigott, deputy executive commissioner of procurement and contracting services, resigned Friday from the agency. Agency officials did not provide a reason for his departure and a copy of his resignation letter to the American-Statesman was redacted.

Pigott, who previously served as the procurement director at the Texas comptroller's office, assumed the role as the health agency's top contract oversight manager in 2015 shortly after the fallout of the 21CT scandal. Problems with Austin data analytics firm 21CT revolved around a $20 million contract between the health agency's inspector general's office and the company to detect Medicaid fraud. A $90 million contract extension with the company was canceled in December 2014 after an American-Statesman investigation revealed an array of problems, including the lack of a traditional bidding process, little oversight and a possible conflict of interest.

In hiring Pigott, the executive commissioner of the health agency at the time Kyle Janek had said Pigott "literally wrote the book on state contracting," the Statesman reported in 2015.

However, Pigott along with current executive commissioner Charles Smith, have been facing scrutiny by lawmakers and Gov. Greg Abbott after it was revealed this month the health agency has bungled more contracts -- approximately $600 millions worth.

Earlier this month, agency officials canceled five managed care contracts worth $580 million after they discovered staff members had evaluated interested vendors with a tool that contained errors. Protest from a managed care organization had tipped the agency off on the error.

The contractors were to provide health care for low-income children in rural parts of the state and in Hidalgo County in the Children's Health Insurance Program. The managed care organizations would have provided services from Sept. 1, 2018, to Dec. 31, 2019. The agency will extend contracts of existing vendors so CHIP patients won't experience an interruption in services, according to the agency.

On Monday, the State Auditor's Office released a report highlighting a series of problems with how the agency awarded a $17.5 million contract in 2016 to develop and maintain a database to track birth and death statistics across state. Auditing officials said the agency inaccurately scored the five interested vendors and used the wrong information to award the bid to Genesis Systems Inc. If the agency had accurately scored the bidders, Genesis would have still earned the contract, the audit said.

The improper approval process also led to a delay of the launch date of the database by a year to Jan. 1, 2019, and increased the cost of the contract by more than $1 million.

Pigott on Wednesday was called before the Texas House Appropriations Committee to answer for the latest contract issues. Pigott answered a series of questions about how the agency allowed the mistakes to happen. At one point in the hearing, Rep. Giovanni Capriglione, R-Southlake, grilled Pigott on signing a so-called attestation letter confirming procurement rules were followed with the awarding of the CHIP contracts, three days before the contracts were canceled.

"Do you know what the penalties are for misstating things on these attestation letters?" Capriglione said.

"Yes, sir, I remember talking with you about it a year ago," Pigott said.

"Remind me," Capriglione said.

"Yeah, it's criminal penalty against the person who signed it," Pigott said.

"I'm having trouble understanding why we're signing off on these attestation letters at the same time that people are protesting, at the same time we're not knowing if those payments are being made, we're not even sure in some cases whether the correct amount for the contract is being disclosed," Capriglione said.

Pigott said during the hearing that no laws had been violated regarding the attestation letter.

The health agency's Chief Operating Officer Heather Griffith Peterson resigned, effective Wednesday. Peterson, who oversaw the agency's procurement process, joins three other staff members who have left the agency recently. Michael Parks, associate commissioner of procurement operations, and two of his aides were fired.